James Madison Papers

To James Madison from John Henry Sargent, 4 July 1813

From John Henry Sargent

Charleston So Carolina, 4 July 1813

Let not Your Excellency be surprised at the confidence of an individual who thus ventures boldly to address him upon a subject so important to his country as that of its finances; for this confidence proceeds perhaps less from a transcendent idea of his own abilities than from an evident & glaring deficiency thereof in the actual administration of the affairs of our Treasury.

To be able to go into the market for the purchase of a bushel of Corn, & to pay for it at any price, is what can be done by a menial servant; to make a loan for a nation & pay for it by an interest at any rate perCent, is what could be done by the most menial clerk in the treasury department. No superior abilities are required, or any extraordinary skill used, in either of these cases. Here is the corn & there is the money, Here is the stock created, bearing the interest proposed or agreed upon, & there is the money loaned upon it. All is simple, plain sailing; no genius required & none displayed. And that this is a true picture of the present management of our treasury affairs, is perhaps to no one more evident than to your Excellency, & what certainly will be denied by no one. It is not the apish juggle that has been introduced by our Financier into the manner of making the late loan that alters the case. I mean that of creating stock to a greater amount than the money borrowed.1 This is a finesse to be made use of when there is an advantage to be gained by it in favor of the state; & to be rejected by a skillful Minister when it will probably work a contrary effect. It may however be adopted as a general rule after the establishment & in the operation of a grand autophagian (if I may be allowed the term) self eating or self sinking system, whose principle should be to eat itself out, or in other words to pay itself off in a long course of years; but certainly not in a plain system like ours, which as it now stands is to be sunk or paid off, at the expiration of a certain fixed number of years, or at least whose professions are so to do. It is not this juggle that has operated in favor of the late loan. On the contrary it is probable the loan might have been obtained upon terms far less onerous by proposals in the plain way, so much money wanted at such an interest. Here the monied men, the greater part of whom are far from being profound calculators, would have seen without juggle, or pig in a poke, the real & specific interest to be paid. They would have been delighted with the extravagance of the gain to be made by it, even had the interest proposed been far less than is now to be paid. They would have been spared the pains of entering into a vain faste2 of calculation; which but few of them understand, & still fewer able or willing to make with accuracy; which therefore has no doubt operated very much against the negociation; and which always will, in such a system as ours, when a high interest is proposed, create a suspicion in the mind of the real Capitalist, keep him aloof, & thus work to the sole benefit of certain private calculating speculators, entirely to the disadvantage of the treasury & discredit of the state. I have said that this manner is apish. Certainly it is. It is aping the manner practiced in the British system of finances; inasmuch as it is an unprofitable & partial imitation; & might have been foreseen to fail in working the effect, which ought to have been had in view: that of obtaining the loan on more moderate, or the most advantageous terms.

But our system of finances is altogether imperfect; and tho’ conformable to the ideas of certain shortsighted, superficial tho’ well meaning politicians, is not at all adapted to the particular situation & circumstances of our Country or a great Nation.

The United states are at this moment tis true in a very critical situation; yet not so critical perhaps, but that their final success may be depended on; & that, one day, sooner or later, they be a great Nation. Of this I am well convinced, whether the affairs of the treasury be conducted by an inferior or more dexterous chief. This, however, is merely the negative state of the question. On the contrary, let their finances be conducted by a skillful agent, let their system be founded upon this broad basis susceptible of being formed by an enlightened, active, laborious & honest mind, & we shall see their Union, the primary object, rivetted; odious internal & direct taxes, as also the unnecessary selling of public lands, prevented; and yet millions saved to the treasury: we shall see their credit exalted, their renown universal: & finally we shall see the United states become indeed & almost immediately a great Nation: A Nation rich & powerful, as well with regard to her treasury, fleets & armies, as with regard to her agriculture, manufactures & commerce; and also with regard to her internal improvements & wealth & prosperity of her citizens. It is on the establishment of an appropriate & well conducted system of finances alone that depends all this sudden public & private prosperity either in peace or war. And on the contrary by the faulty course & mismanagement now pursued we shall be obliged to wait with patience the tardy & retarded increase of her population, before we can have any reasonable expectation of arriving at the same degree of prosperity.

Shortsighted politicians compare the debt of a Nation to that of an individual, & therefore say, “let us keep out of debt.” But your excellency is doubtless well aware of the error of this Opinion, at the same time that he is well aware of its prevalance in this country. Necessity however will soon convince them, as already many are convinced, that this chimera is too difficult, & costs too much to keep in practice, & that they must at last come into the contrary & more reasonable alternative. And therefore since the measure has become inevitable there is no time to be lost.

Several years have now elapsed since the idea first occurred to me how the finances of this country might be arranged so as considerably to sink, or lower the interest of money, as well at the treasury as among the people; & thus produce the happy effects here hinted at; for it is certain that on the interest of money the prosperity of a nation depends. But to what purpose is it that ideas occur to one who is not in a situation to put them in practice. Why pass nights & days & days & nights for years together, and almost to ones ruin, speculating upon a subject where there is but a very distant prospect of ever being able to realise, either to ones own advantage or to that of ones country. It is true a discovery in any of the arts & sciences gives great pleasure to the inventor & frequently, indeed but too frequently, this is the whole amount of his profit; whether the invention be ever reduced to practice or not, or by himself or another. Let this however be as it may it is our duty to place ourselves in the way of being known, & to leave the rest to time. It is therefore that I have done myself the honor to address your Excellency, thus putting myself in the way, & thus doing my duty; leaving the rest entirely to your excellency to act as shall seem to him most favorable to the interest of our country: Observing however on my part that the only place to which I aspire is neither higher or lower than that of secretary of the Treasury.

It may not be amiss to observe to your Excellency that tis not the thirst of office which impels me thus to proffer my services; for on the contrary I am known to be fond of retirement, and never before in my life made application for a public office of any description, having been always able to procure private employment enough & to advantage whenever I have stood in need of it, & therefore tis only the desire of being in a situation to put my feeble talents into activity to my countrys advantage & my own honour. I have the honour to be with the most profound respect, & in high consideration of your Excellency, his most obedient & very humble servant

Jno Hy. Sargent3
Native of Boston, Massachusetts

There are certain gentlemen from So Carolina in Washington some of whom for political & some for other reasons may not be friends of mine so far as to wish me success. A man who has ever published a Newspaper cannot have pleased everybody, especially such a paper as was mine, the Strength of the People. Should it therefore happen that your Excellency make enquiry respecting myself he will doubtless receive the information with caution.

RC (DLC). Docketed by JM.

1Subscribers to the sixteen million dollar loan authorized by Congress on 8 Feb. 1813 could elect to receive one hundred dollars in stock for every eighty-eight dollars loaned, or stock equal to the amount of money loaned plus an annuity, for thirteen years, of one dollar and fifty cents for every one hundred dollars loaned. In either option, the stock carried an interest rate of six percent (ASP description begins American State Papers: Documents, Legislative and Executive, of the Congress of the United States … (38 vols.; Washington, 1832–61). description ends , Finance, 2:626).

2Faste: pomp, ostentation.

3John H. Sargent published The Strength of the People, a Charleston newspaper, from 1809 to 1810 (Brigham, History of American Newspapers, 2:1045).

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